The issue is definitely that you are not connected to wifi. In your device connections in the car menu it should be there. Do a quick google search on how to connect to the wifi on iDrive 7. This is definitely an issue... hopefully the issue.
Edit... check this video out.
Once you have WiFi connected - you will need to find the connection on your phone and add the password etc. Then on that same screen he has for devices (25 seconds into the video), click on your phone and then scroll down to Android Auto and connect.